Market Watch : Beware: Pensions Are an Endangered Species : Retirement: Many pension plans are dying and benefits are being reduced. The best bet is to start saving on your own.

The best technique for evaluating your company pension plan is this: Pretend it doesn’t exist, because it may not be there when you need it.

Nationwide, companies are reducing benefits, killing pension plans and failing to start new ones as the rules governing retirement programs become more complex and expensive to follow.

According to Howard Weizmann, executive director of the Assn. for Private Pension and Welfare Plans, about 15,856 defined-benefit pension plans were terminated in 1989, a 37% increase from 1988, while only 5,461 plans were created, a 67% drop.

“Retiring with a pension is becoming the exception, not the rule,” a Kemper Financial Services publication concluded, quoting Census Bureau figures that show the percentage of workers covered by pension plans falling steadily to a current level of 49% from 55.7% in 1979.

Ironically, some industry officials blame the trend on the very government rules aimed at protecting pensions.

ERISA, the Employee Retirement Income Security Act, introduced standards for pensions in 1974 because too many pension programs were not ever going to pay any retirement benefits.

Pensions were poorly run, and employees, without the protection of federal management and vesting requirements, often found themselves working for companies for an entire career and then finding there was no money in the retirement fund for them.

Since 1974, standards have improved, coverage has widened and the stock market has helped swell pension pots. “We’re living in the golden age now,” Weizman said in a recent interview. “But the system isn’t going to make it in 30 years.”

Weizman believes that many companies now see the costs of running a pension plan as too high to justify them. There will be a continuing erosion of defined benefit plans, under which employees know how much benefit they are entitled to based on their salaries and years of service.

In their place will be more and more 401(k) plans, a form of retirement savings that shifts more responsibility for savings to employees by allowing them to save pretax dollars for their retirement. Many--but not all--companies contribute to employee 401(k) plans by matching a percentage of employee contributions.

But 401(k) programs will not replace all of the retirement income of defined benefit plans, Weizman said, because they are based on employees’ entire salary record. Where a defined benefit plan might pay benefits on the basis of a person’s last three- or five-year average salary, the 401(k) plan is based on the employee’s own deposits, which may be comparatively low in the early years of his or her career.

At the same time that workers are asked to fund more of their own retirement savings, government data show that lengthening life expectancy and earlier retirement means the money in those accounts will have to last longer.

However, there is some good news for younger workers looking ahead to retirement. Although they may not benefit from fat pension plans, there is some evidence that they are saving for retirement from younger ages than their parents did. The availability in the early 1980s of individual retirement accounts helped some people to earmark retirement money early, and 401(k) plans are doing the same thing now.

More good news comes in the form of retirement planning kits that are available from virtually every mutual fund company and many banks. Individuals who decide to become self-reliant about their retirement savings will find that they can get planning information on how much to save and how to save it from every corner.

Here are a few more ways to make sure your retirement money is there when you need it and lasts as long as you do:

Contribute the maximum allowable amount to any tax-deferred vehicle for which you are eligible, says Washington financial planner Susan Freed. If you are still eligible for a tax-deferred IRA, contribute $2,000 annually. If your company has a 401(k) plan, elect to contribute the maximum allowed. That can amount to as much as 15% of your salary, up to $7,900 a year, she said.

Start saving as early as possible. That’s not always easy once you have children and a mortgage, so Freed recommends saving the maximum in tax-advantaged retirement accounts before those other responsibilities come along.

Small amounts saved earlier can mean more than large amounts saved later, because of the advantages of compound interest on money that is not being taxed.

Consider this example from Michael Carey, a financial planner with the Washington firm of Alexandra Armstrong Advisors:

“Jane starts saving $5,000 a year when she’s age 35 and continues saving $5,000 a year until she’s age 43. John doesn’t begin saving until he’s age 43, but he puts $5,000 a year aside each and every year until he’s 65. By age 65, Jane has invested a total of $40,000 and John a total of $110,000.

“If they both earned 10% on their money, Jane . . . would have accumulated $512,000 to $357,000 for John, even though he invested $70,000 more.”